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CEO Survey  Says Cost Optimization Is Top Issue  for Supply Chain Executives

CEO Survey Says Cost Optimization Is Top Issue for Supply Chains

July 30, 2021
Even as 60% of CEOs expect an economic boom to start by year-end 2022, they predict ongoing supply chain challenges.

CEOs and senior business executives in supply-chain-intensive industries showed that 17% see cost optimization as the number one issue that chief supply chain officers (CSCOs) should focus on in the near future, followed by supply chain resilience (16%)., according to a new Gartner study.   

“CEOs are tasking their CSCOs to focus on navigating through the ongoing disruption and ensure business continuity,” said  Thomas O'Connor, senior director analyst with the Gartner Supply Chain practice, in a statement. “This includes dealing with pandemic-related lockdowns in key markets, supply chain shortages – as seen in the semiconductor industry – and challenges with the global flow of goods and increasing distribution costs.”

As CSCOs navigate through the lingering effects caused by the COVID-19 pandemic, they also must prepare for the growth agenda the CEOs have in mind for the future, the survey said.  In fact, the survey, which was conducted from July 2020 through December 2020, showed that 60% of CEOs expect an economic boom to start by year-end 2022. However, CSCOs will face ongoing challenges.

“Different regions of the world are recovering at different paces. CSCOs need to prepare for a dual-speed recovery for both supply and demand where markets with high vaccination rates bounce back far more quickly than those without,” O’Connor added.

Targeted Initiatives for Digital Business

The majority of respondents want to focus on technology, and they plan to increase year-on-year investments in digital capabilities (80%). The trend appears to be shifting from a general, undefined ambition for digital business transformation toward more targeted initiatives. CSCOs need to confirm their CEOs’ intended meaning of digital business within the context of their own organization or industry.

Survey respondents’ most popular areas of digital business were e-commerce/e-business (16%), customer interactions (9%), data analytics (9%) and customer experience (7%).

Organizations Will Change Their Structure and Behavior

CEOs anticipate the pandemic will have a lasting impact on their businesses, with over two-thirds of survey participants indicating they will use the pandemic as an opportunity to focus on redesigning the business. Further, 79% of CEOs expect to see significant and enduring behavioral changes in society, the organization and individuals that are a direct result of the pandemic. For supply chain leaders this means that they should prepare for their business, key ecosystem partners and/or competitors to undergo organizational behavioral shifts.

“Already, a range of companies have committed to social responsibility and sustainability goals – a huge integration challenge for supply chain leaders that manage global networks. This means supply chain leaders need to establish metrics and goals for themselves and their partners and ensure their targets are met across the whole value chain,” O’Connor concluded.

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